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Singapore Telecommunications Limited’s Latest Earnings: Lower Revenue and Profit for The Year

Earlier this morning, Singapore Telecommunications Limited (SGX: Z74) reported its fourth quarter and full-year earnings for its fiscal year ended 31 March 2017 (FY2017).

As a quick background, Singtel is one of the largest telecommunications companies in Asia and it has operations in Singapore and Australia. It also has interests in a number of other Asian telcos.

You can catch up with the results from Singtel’s previous quarter here.

Financial highlights

The following’s a quick rundown on some of the latest financial figures for Singtel:

1. Singtel’s revenue was up 5% year-on-year to S$4.31 billion in the fourth quarter. For the full fiscal year, Singtel’s revenue was down 1.5% to S$16.71 billion.

2. Net profit attributable to shareholders was up 2% to S$946 million in the reporting quarter. For FY2017, Singtel’s net profit came in at S$3.85 billion, slightly lower than FY2016’s S$3.87 billion.

3. Diluted earnings per share (EPS) was S$0.059 for the fourth quarter, down slightly from S$0.0594 a year ago. Singtel ended FY2017 with a diluted EPS of S$0.2391, down 1.4%.

4. For the reporting quarter, cash flow from operations was S$1.42 billion and capital expenditure was S$652.8 million. As such, Singtel generated S$763.2 million in free cash flow for the quarter, up 12% year-on-year. For FY2017, Singtel generated S$3.05 billion in free cash flow, a 12% increase from FY2016.

5. As of 31 March 2017, the telco had S$534 million in cash and equivalents and S$11.19 billion in debt. This is down from the S$462 million in cash and equivalents and S$9.94 billion in debt recorded on the same date last year.

For the fiscal year, Singtel’s revenue and profit both declined slightly, and its balance sheet weakened. But, the telco generated over $3 billion in free cash flow for FY2017, up 12% from FY2016.

Singtel proposed a final dividend of S$0.107 per share. Together with the interim dividend of S$0.068, the total dividend payout for FY2017 will be S$0.175 per share, unchanged from FY2016.

Operational highlights and what lies ahead

Revenue from the Singapore Consumer business rose 1% year-on-year to S$589 million for the fourth quarter. Singtel’s Australian Optus arm saw its revenue increase 3% to A$1.74 billion.

Elsewhere, Singtel’s share of pre-tax earnings from its regional mobile associates was down 6% year-on-year to S$658 million for the reporting quarter. Pre-tax profit from Telkomsel was up 17% year-on-year, but Airtel’s 51% decline in pre-tax profit was a drag on things. AIS’s 17% pre-tax profit decline was also a culprit.

During the reporting quarter, Singtel’s Group Enterprise segment enjoyed a 3% revenue increase to S$1.72 billion.

Elsewhere, the Group Digital Life segment’s revenue was up 9% year-on-year to S$147 million during the quarter, boosted by strong revenue growth at Amobee. The division continued to post negative EBITDA (earnings before interest, taxes, depreciation, and amortisation), though the loss had narrowed from S$39 million a year ago to S$36 million. Revenue from HOOQ, the segment’s online video streaming service, and Dataspark was collectively S$7 million for the reporting quarter.

Chua Sock Koong, Singtel’s chief executive officer, shared the following comments on the company’s quarter:

“We have turned in a strong set of results this quarter despite a challenging business environment. This performance demonstrated the strength of our core businesses and diversified operations, aided by strong cost management. Our investments in networks and spectrum, differentiated content and innovative plans have helped us stand out from the competition and win new customers.”

Singtel expects to grow its revenue by mid-single digits and EBITDA in low single digits for the coming fiscal year.

At its opening price today of S$3.71, Singtel traded at 15.5 times trailing earnings and had a trailing dividend yield of 4.7%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.